Annual Report 2023: Money Laundering Reporting Office Switzerland

On May 1, 2024, the Money Laundering Reporting Office (MROS)- Switzerland – released its annual report based on SARs.  The findings showed enormous growth in Suspicious Activity Reports, emerging cryptocurrency risk, and improved intervention by the legislators in preventing financial crime transparency.

It mentions that the number of SARs has increased by 56% due to greater regulatory diligence and the application of improved technology in monitoring. MROS has modified its risk-based methodology to tackle the issue of SARs that are based on serious crimes. Furthermore, the problems related to virtual assets integration into financial systems, legal adjustments, and international sanctions are of great significance too.

The report also identifies the need to work on the development of goAML system data processing and data quality problems. MROS emphasized forming a stronger international network to improve the struggle against financial crimes.

Significant Findings Of Annual Report 2023

The key findings of the report as compared to previous years are:

• The volume of incoming SARs continued to increase in 2023. MROS has 47 SARs for each day, which was the total of SARS received 11,876 last year. Compared to previous figures (7,639)in 2022 and (5964) in 2021  this increase represents a 56% growth in SARs.
• The introduction of the goAML information system in January 2020 has been held responsible for such an increase which exceeded the all-time high by more than 200%.
• The stats show that the banking sector reported 90.5% of these SARs compared to 92% in 2022.

• Cryptocurrencies contained 14.5% of incoming SARs in 2023 with a rise from 2022’s 13.8% and 8.4% from 2021. MROS actively participates in evaluating these risks within the framework of the national risk assessment and acknowledges the increasing inclusion of virtual assets into the banking sector has prompted
• The amount of information requested under Article 11a AMLA maximized by 7.1% in 2023 as compared to 2022.
• Last year, MROS sent a total of 67 requests to 280 FIUs all over the world, this is (+1.8 %) higher than in 2022. As a result, MROS’ assistance is now requested from more than 92 FIU offices worldwide with 705 reports which is -17.2% less compared to the previous year.
• In the year 2023 alone, MROS sent 866 instances to prosecutors’ offices. Hence, it is noted that this amount has slightly decreased by 29.7 % (1,232) from 2022, but the cases have been more severe now.
• In 2023 MROS got 726 spontaneous information reports from 53 different jurisdictions as compared to 709 from 50 states in 2022.  In response, MROS asked for 160 spontaneous information reports from 47 foreign FIUs as compared to 178 from 42 countries in 2022.
• The average number of SARs submitted to the prosecution authorities per case increased (2023: 1.8, 2022: 1.4, 2021:1.3). Additionally, 44 % of the cases forwarded to the prosecution authorities in 2023, 25% in 2022, and 18% in 2021 are processed by information shared by financial intermediaries.
• MROS has improved its risk-based strategy by emphasizing more serious offenses. Despite a 30% decrease in the total number of cases given to all prosecuting agencies, this strategic change led to a 43% increase in cases sent to the Office of the Attorney General of Switzerland.
• By 2023 MROS has processed a total of 696 references of information requested by other institutions, which is 4.3% more than the previous year.  Furthermore, the MROS transferred 200 spontaneous reports to their domestic supervisory bodies and those who are responsible for fighting money laundering cases as well as organized crimes. This shows an increase of 13.0% from 2022.

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Growing Regulatory Diligence And Strong Monitoring

The implementation of a transparency register and the new Anti-Money Laundering Act (AMLA) aims to strengthen transparency in the financial system and provide a legal basis for the prevention of financial crimes. The Report also suggests the cause of such a large number of Suspicious Activity Reports from 20 to 30% over the last decade. Key factors include:

• Raising awareness about combating money laundering due to many scandals in the Swiss banking system.  Banks have developed their financial crime and compliance departments.
• The increase in regulatory due diligence and reporting requirements since 2013.
• The development of technology has improved transaction monitoring capacities.
• Since 2020, the change from paper-based reports to goAML has made it easier to make SAR submissions.
• Growing adherence to a risk-based approach and general developments in the risk-based ML/TF reporting system.

The 2023 MROS annual report covers multiple essential aspects, like the implementation of goAML systems, risk-based approach, higher institutional coordination, and overall technological advancement in combating money laundering and terror financing crimes.